RALEIGH, N.C.
Xerium Technologies, Inc. (NYSE: XRM), a leading global manufacturer of
clothing and roll covers used primarily in the paper production process,
is announcing today the closing of 2 more of its manufacturing plants,
the further reduction of headcount in Europe and the movement of
polyurethane roll casting equipment to China. Within the last year, the
company has initiated the closing of 4 manufacturing operations,
installed new machines in low cost countries, and lowered its SG&A
costs. The company is in the beginning stages of a multi-year
repositioning of its cost structure and asset base to better mirror its
served markets.
Xerium has commenced negotiations to close its paper machine clothing
facility in Zizurkil, Spain with its employees’ representatives and is
closing its spreader roll facility in Charlotte, North Carolina. The
company expects permanent annualized cost savings of $3.2 million from
these actions.
“These closures, while difficult on the affected people and communities,
are reflective of Xerium’s need to restructure its cost profile and to
better align its asset base with natural market sizes”, said Harold
Bevis, Xerium’s President and Chief Executive Officer. “These actions
demonstrate our management team’s resolve to take immediate and
continuous steps to get Xerium back on track to deliver increased
Adjusted EBITDA and shareholder value.”
The measures announced today are additive to previously announced cost
restructuring actions. Those previously announced actions are expected
to result in annual savings of $13.8 million, bringing the cost-takeout
total to $17.0 million. These cumulative actions include:
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Reduction of selling costs in Europe via termination of sales agency
agreements
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Closure of clothing production operation in Argentina
-
Closure of roll covering plant in France
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Reduction of base costs in Europe via headcount reduction
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Closure of clothing plant in Spain
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Closure of roll covering plant in North Carolina
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Redeployment and expansion of capabilities and capacity in China and
Mexico
“The company is just getting underway with its multi-year repositioning
and expects significant additional cost restructuring actions in the
future. There is a pace to these repositioning actions as they are
complicated and are all being funded from the company’s natural cash
flow”, said Harold Bevis.
About Xerium Technologies
Xerium Technologies, Inc. (NYSE:XRM) is a leading global manufacturer
and supplier of two types of consumable products used primarily in the
production of paper-clothing and roll covers. The Company, which
operates around the world under a variety of brand names, utilizes a
broad portfolio of patented and proprietary technologies to provide
customers with tailored solutions and products integral to production,
all designed to optimize performance and reduce operational costs. With
30 manufacturing facilities in 13 countries around the world, Xerium has
approximately 3,275 employees.
FORWARD-LOOKING STATEMENTS
This press release contains “forward-looking statements”, including
those regarding facility closures, the anticipated timing of those
actions and the anticipated savings. Forward-looking statements involve
risks and uncertainties, both known and unknown, that may cause the
proposed closures, the anticipated timing of those closures and actual
results to differ materially from those indicated. These risks and
uncertainties include the following items: (1) prolonged negotiations
with the employees’ representatives and/or changes in Spanish employment
law may materially increase the difficulty and/or costs of these
workforce reductions and the closing of the facility; (2) a sustained
downturn in the paper industry, compounded by uncertainty in global
economic conditions, could adversely affect our revenues and
profitability; (3) our financial results could be adversely affected by
fluctuations in interest rates and currency exchange rates, for instance
a marked decline in the value of the Euro relative to the U.S. Dollar
stemming from the European sovereign debt crisis; (4) market improvement
in our industry may occur more slowly than we anticipate, may stall or
may not occur at all; (5) variations in demand for our products,
including our new products, could negatively affect our revenues and
profitability; (6) our manufacturing facilities may be required to
quickly increase or decrease production, which could negatively affect
our production facilities, customer order lead time, product quality,
labor relations or gross margin; (7) our plans to develop and market new
products, enhance operational efficiencies, and reduce costs may not be
successful; and (8) the other risks and uncertainties discussed
elsewhere in this press release, our Form 10-K for the year ended
December 31, 2011 filed on March 14, 2012 and our other SEC filings. If
any of these risks or uncertainties materialize, or if our underlying
assumptions prove to be incorrect, actual results may vary significantly
from what we projected. Any forward-looking statement in this press
release reflects our current views with respect to future events. Except
as required by law, we assume no obligation to publicly update or revise
these forward-looking statements for any reason, whether as a result of
new information, future events, or otherwise. As discussed above, we are
subject to substantial risks and uncertainties related to current
economic conditions, and we encourage investors to refer to our SEC
filings for additional information. Copies of these filings are
available from the SEC and in the investor relations section of our
website at www.xerium.com.
Xerium Technologies, Inc.
Clifford E. Pietrafitta, 919-526-1444
Executive
Vice President and CFO
IR@xerium.com